2011/2012 BUDGET/REVIEW OF DRAFT BUDGET AND SUPPLEMENTAL BUDGET NARRATIVE.

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1 May 10, 2011 ITEM#: RE: PREPARED BY: 6.A.2) 2011/2012 BUDGET/REVIEW OF DRAFT BUDGET AND SUPPLEMENTAL BUDGET NARRATIVE. D.J. Baxter EXECUTIVE SUMMARY: The RDA Annual Budget establishes the funding for projects and programs for the next fiscal year. The Project Area Budgets are established from estimates of tax increment generated within each of the project areas. Board members will need to review the allocations and provide staff with any requested revisions prior to the June budget adoption. RAC RECOMMENDATION: At its meeting on Wednesday, May 4, 2011, the Redevelopment Advisory Committee reviewed the draft budget and did not request any changes. ANALYSIS AND ISSUES: The adopted budget is articulated on a series of spreadsheets showing expected revenues and budget expenditures for the year. Staff also prepares a narrative supplement to the budget that has been attached to the budget spreadsheets. The supplement provides information about the project areas and special funds as well as restrictions or requirements for budget allocations. Contract Planner Position: Board members recently asked that we prepare a proposed task list for the contract planner position funded in the draft budget. That task list is attached for review and comment. Board members should be prepared to comment on the spreadsheets and supplement so the documents can be finalized for adoption at the June 2011 Board of Directors meeting. ATTACHMENTS: 1. Proposed Task List for RDA Contract Planner 2. Draft 2011/2012 Budget 3. Draft Supplemental Budget Narrative

2 Proposed Task List for RDA Contract Planner FY 2011/2012 West Temple Gateway/Granary: 1. Initiate rezone of the properties zoned CG to comply with the Gateway Specific Plan; 2. Initiate rezone of the Fleet Block from Public Land to a more appropriate zone; 3. Develop a zoning overlay for single-family homes (attached and detached) as proposed in the West Temple Gateway Development Strategy; 4. Create a zoning overlay that includes design guidelines as proposed in the West Temple Gateway Development Strategy. Depot District & North Temple: 1. Initiate rezone of the properties zoned CG to comply with the Gateway Specific Plan; 2. Initiate rezone of properties zoned D-3 to a transit-oriented development zoning designation in Depot District, particularly surrounding Intermodal Hub; 3. Assist RDA with understanding the new form-based zoning process in North Temple. West Capitol Hill: 1. Analyze the feasibility of rezoning the properties zoned CG, M-1, and CB to comply with the master plan, which calls for high- and medium-density mixeduse; initiate rezone based on results of feasibility analysis; 2. Create design guidelines/historic guidelines to encourage massing/scale of structures be compatible w/ adjacent areas and that buildings adjacent to streets should orient to the street. Sugar House: 1. Amend the master plan where necessary to be consistent with the policies recommended by Streetcar Land Use & Visioning process, and initiate any zoning changes needed to implement those policies. Central Business District: 1. Address building height maximums to encourage economically viable density for residential projects; (e.g., some projects build to lower than allowed density because height limits restrict the economic feasibility of a larger project); 2. Analyze the feasibility of amending the D-1 zoning district relating to the 100 restrictions for buildings located on interior block faces; initiate amendments to zone based on results of feasibility analysis; 3. Consider allowing additional height in the D-4 zoning district; (e.g., two of the proposed convention hotel sites are zoned D-4, which has a height limit of 75 feet (up to 120 feet with conditional use).

3 REDEVELOPMENT AGENCY OF SALT LAKE CITY ANNUAL IMPLEMENTATION BUDGET - PROJECT AREA FUNDS May 10, 2011 C.B.D. SUGAR W.TEMPLE W.CAPITOL DEPOT GRANARY S.A.R.R. EXT HOUSE GATEWAY HILL DISTRICT DISTRICT TOTAL SOURCES: Tax Increment Proceeds 16,170,302 12,839,698 3,000,000 1,500, ,000 6,500, ,000 41,610,000 Interest Income 32,181 34,000 40,000 8,000 12,000 19,000 5, ,181 Reallocation 92,000 92,000 Land Sales Proceeds 1,250,000 1,250,000 16,202,483 12,873,698 4,290,000 1,508,000 1,004,000 6,519, ,000 43,102,181 USES: Administration 110, , ,587 90, , ,000 23,000 1,501,587 Streetcar Project Manager 15,000 35,000 2,500 20,000 2,500 75,000 Contract Planner 15,000 20,000 5,000 5,000 25,000 2,500 72,500 Assessment and Collection Levies 48,021 20,544 8,560 9,844 73,188 3, ,095 State Tax Overpayment Reserve 32,000 45,000 10, , ,800 60% TEC Payment 1,682,998 1,682,998 TEC Payment** 6,020,821 6,020,821 Bonds: Delta Center/Salt Palace CAP 7,385,000 7,385, A (Delta Center/Salt Palace) Refunding 1,351,738 1,351,738 FQF Financing Agreement 1,755,532 1,755, West Park Blocks 1,030,179 1,030,179 Steiner Ice Sheet 1,560,737 1,560,737 School District Contract #1 (Delta) 390, ,000 School District Contract #2 (Salt Palace) 1,092,092 1,092,092 School District Contract #3 (FQF) 438, ,838 School District Contract #4 (500 West) 412, ,072 School District Contract #5 (Steiner Ice Sheet) 624, ,295 Trustee's Fees 20,000 20,000 Temporary Property Expense 6,500 75,500 42, ,000 3, ,800 City-Wide Housing 120,000 25,000 28, ,750 11, ,000 Project Area Housing 60,000 25,000 28, ,750 11, ,000 City -Wide Housing ** 501,735 90,000 50,000 16, ,250 23, ,735 Project Area Housing** 501,735 90,000 50,000 16, ,250 23, ,735 Loan Programs 312,956 14, ,796 Downtown Arts District Planning & Implementation 100, ,000 Downtown Arts District Planning & Implementation** 2,300,000 2,300,000 Land Acquisition & Development 230, ,000 20, ,077 Land Acquisition & Development** 400, , , ,000 1,100,000 Gallivan Art Tower ** 200, ,000 Street Car Design & Implementation 110, ,000 15, ,977 Street Car Design & Implementation** 510, , , ,000 23,000 1,933,411 Public Improvements & Development Incentives 340, , , ,156 Public Improvements & Development Incentives** 370, ,000 92, ,000 1,012,500 Grant Tower Reconfguration (debt service) 281, ,854 Gateway Associates (reimbursement agreement) 1,875,000 1,875,000 Homestead Suites (reimbursement agreement) 185, ,255 Artspace Commons (reimbursement agreement) 56,085 56, So. Main Reimbursement 500, ,000 Portable Garden 16,400 16,400 Public Market 145, ,203 Public Market ** 300, ,000 Development Strategy Implementation 250, ,000 Development Strategy Implementation ** 502, ,500 Parking Structure ** 400, ,000 Streetscape Amenities Development 403, ,413 Streetscape Amenities Development ** 500, ,000 Sugar House Compass 5,000 5,000 16,202,483 12,873,698 4,290,000 1,508,000 1,004,000 6,519, ,000 43,102,181 Over/(Under) *'* means contingent on TIF received

4 REDEVELOPMENT AGENCY OF SALT LAKE CITY ANNUAL IMPLEMENTATION BUDGET May 10, 2011 PROJECT AREA CITY WIDE RETAIL PROGRAM HOUSING HOUSING REBATE INCOME FUND FUND FUND TOTAL SOURCES: Transfers from Tax Increment Funds 1,131,735 1,191,735 2,323,470 Parking Structure Income 1,185,992 1,185,992 Loan Repayments 590, ,000 Property Sales 0 Interest Income 300,000 20, ,000 Reallocation 0 Temporary Property Income 0 Parking Lease Revenue 0 Sales Tax Revenue: 0 Hermes 209, ,475 Sutherlands 0 0 2,075,992 1,151,735 1,191, ,475 4,628,937 USES: Administration 143,255 70,000 70,000 2, ,350 Contract Planner 10,000 10,000 Temporary Property Expenses 669,000 15, ,000 Block 57 - Maintenance 400, ,000 Block 57 - Plaza Programming 289, ,000 Block 57 - Lease Payment 28,000 28,000 Sales Tax Projects: 0 Hermes 207, ,380 Sutherlands 0 Project Area Creation 86,737 86,737 Downtown Arts District Implementation 0 Project Area Housing 0 Project Area Housing** 0 Land Acquisition 0 City-Wide Housing 0 City-Wide Housing* 0 Housing Trust Fund 109, ,000 Housing Trust Fund** 492, ,735 Quiet Zone 100, ,000 Quiet Zone ** 300, ,000 Move the Line 0 Move the Line ** 0 Gallivan Art Tower 150, ,000 Gallivan Ave Branding 150, ,000 Marketing & Sales 150, ,000 WCH Housing Loans 274, ,000 WCH Housing Loans ** 792, ,735 Land Acquisition - SRO 120, ,000 Land Acquisition - SRO ** 0 2,075,992 1,151,735 1,191, ,475 4,628,937 Over/(Under)

5 INFORMATION SHEET 1 May 10, 2011 REDEVELOPMENT AGENCY OF SALT LAKE CITY ADMINISTRATIVE BUDGET Object DRAFT Code Description Budget Executive Salaries 844, Executive Longevity 5, Hourly pay - seasonal employees 20,600 SUBTOTAL SALARIES & WAGES 870, Plan B cash conversion FICA 66, State Retirement Deferred Benefit 401K 35, /16 Non-Contributory 80, C9 8, Group Insurance 115, Salary contingency 0 SUBTOTAL EMPLOYEE BENEFITS 306,887 TOTAL PERSONAL SERVICES 1,177, Books Periodicals Stationery Supplies 2, Duplication Supplies 7, Copy center charges 2, Postage 4, Computer Software 3, Other Materials & Supplies 3,500 TOTAL MATERIALS AND SUPPLIES 23,050 OPERATING & MAINTENANCE SUPPLY 2311 Auditing Fees 17, Legal Fees 25, Engineering/Architecture 2324 Special Consultant incl , Technical Services 5, Lobbyist 25, Telephone - Long Distance Telephone - Cell 8, IFAS Maintenance & Network Sup 70, Office Equipment MC 4, Public Notices 2,000

6 Educational Training 5, Phone Maintenance Plan 8, Mileage 200 TOTAL OPERATING & MAINTENANCE SUPPLY 171,900 CHARGES & SERVICES 2512 Building Rent 48, Other Office Equipment Rentals Meals & Entertainment 12, Employee Meal Allowance Memberships 3, In-City Conventions 4, Out-of-town Travel 22, Auto Allowance 6, Rewards & Recognitions 2, Other Employee Costs 1, Insurance/Surety Bonds 40, Risk Management Premium 7, Occupational Health Clinic Charges Other Expenses 3,300 SUBTOTAL CHARGES & SERVICES 150,400 GOV'T TRANSACTION COSTS Administrative Service Fee 240,000 & IFAS GOV'T TRANSACTION COSTS 240,000 TOTAL CHARGES & SERVICES & GOV'T TRANSACTION COSTS 390,400 SUBTOTAL-NON-CAPITAL & GOV TRANSACTION COSTS 1,762, Capital Expenditures Equipment 12, Office Equipment & Furnishings 12,500 TOTAL CAPITAL EXPENDITURES 24,500 TOTAL ADMINISTRATIVE EXPENDITURES 1,786,937 DETAILS:

7 May 10, 2011 STAFFING DOCUMENT BUDGET YEAR Pay No. of Grade Positions Executive Director 39 1 Deputy Director 37 1 Property Administrator 26 1 Project Manager 26 3 Project Coordinator/Mgr 24 3 Communications Position 24 1 Office Manger 21 1 Administrative Secretary 18 1 Project Area Specialist 22 1 Office Technician 1 Seasonal

8 REDEVELOPMENT AGENCY OF SALT LAKE CITY SUPPLEMENTAL BUDGET INFORMATION & NARRATIVE FISCAL YEAR 2011/2012 The following document is supplemental to the annual implementation budget to be adopted by the Board of Directors on June 14, This document discusses the goals and objectives of each of the project areas, the sources of revenues generated, and the allocation of funds to accomplish certain goals and objectives by project area or fund type. It also discusses the priority of funding of projects within the districts depending upon the amount of actual tax increment received. The report is organized by fund and is in the same order as the Annual Implementation Budget. The supplemental information is organized as follows: OVERVIEW... 1 BUDGET PROCESS... 1 ADMINISTRATIVE BUDGET... 2 FUND BUDGETS... 3 SARR (STATUTORY ALLOCATION REDUCTION REVENUE)... 4 CENTRAL BUSINESS DISTRICT PROJECT AREA... 5 SUGAR HOUSE PROJECT AREA WEST TEMPLE GATEWAY PROJECT AREA WEST CAPITOL HILL PROJECT AREA DEPOT DISTRICT PROJECT AREA GRANARY DISTRICT PROJECT AREA PROGRAM INCOME FUND HOUSING FUND ALLOCATIONS PROJECT AREA HOUSING FUND CITY-WIDE HOUSING FUND RETAIL REBATE FUND BUDGET AMENDMENTS... 35

9 OVERVIEW The Redevelopment Agency of Salt Lake City was created in 1969 and currently has six project areas within which the Agency concentrates its efforts. In addition, the Agency works with housing providers and advocates to improve the housing stock on a city-wide basis. The Agency is governed by Utah statute, which has been amended numerous times. The current statute is the Community Development and Renewal Agencies Act (Utah Code Annotated, Section 17C). The mission of the Redevelopment Agency of Salt Lake City is to improve blighted areas of Salt Lake City, encourage economic development of Salt Lake City, encourage the development of housing for low- and moderate-income households within Salt Lake City and encourage compliance with and implementation of the Salt Lake City master plan. The Agency will participate with Salt Lake City, Salt Lake County, the State of Utah and other public entities, as appropriate, to implement its mission. The tools available to achieve the Agency s mission include: 1. Property acquisition, demolition, re-planning, sale, and/or redevelopment; 2 Planning, financing and development of public improvements; 3. Providing management support and financing for projects that will improve blighted areas; 4. Gap financing in the form of loans, grants, and equity participation to encourage private investment; 5. Relocation assistance and business retention assistance to businesses. To accomplish this mission, the Agency has developed a number of programs within each of the project areas to promote redevelopment. These programs typically provide loans and reimbursements to encourage renovation and certain types of developments. The Agency s six project areas were created under the redevelopment statute at various times over the past thirty years. Statutorily, the Agency is required to budget and account for each project area separately. In addition, the Agency has established other funds including Project Area and City-Wide Housing funds as permitted under the statute. The Agency s accounts are audited annually and transmitted to the State Tax Commission and taxing entities as required by the statute. BUDGET PROCESS The budget process is a multi-month endeavor that requires reports and requests being sent to and received from the Salt Lake County Auditor s office; receiving and reviewing funding applications from public and private groups; and a determination by the Board of Directors of the funding allocations for projects and programs for the upcoming fiscal year. The budget documents include ongoing obligations such as debt service payments, reimbursement 1

10 agreements, administrative costs, temporary property expenses; revenues; and special allocations for new projects and programs. On or before November 1 of each year, the Agency is required to submit a request to the Salt Lake County Auditor requesting funds for the following tax year. This request is submitted prior to the time the Agency has information concerning the current year tax increment proceeds. The statute also states that the Agency can receive no more than it requests. Thus, to ensure that the Agency s request adequately covers any unanticipated growth in tax increment revenues, the Agency often requests more tax increment proceeds than may be generated in each of the districts. To ensure that funding is available for projects, the Board budgets both certain tax increment, which is typically an amount slightly more than the tax increment received from the most recent final tax increment settlement, and uncertain or contingent allocations, to account for any unexpected increases in tax increment that might make more funds available. The projects funded with uncertain allocations are not started until such time as the tax increment settlement information is received from Salt Lake County, usually in late march, during the final quarter of the fiscal year. A budget amendment is then prepared and presented for adoption that balances actual tax increment receipts and funding allocations. ADMINISTRATIVE BUDGET The Agency s Administrative Budget document includes the staffing document and the allocation of funds to pay for personnel services and general operating costs. The staffing document shown below describes the number and pay grades of the approved staffing for the Agency for the current and most recent fiscal years. STAFFING DOCUMENT No. of Positions Pay Class Pay Class Executive Director Deputy Director 004/ Deputy Director RPT Senior Project Manager n/a 0 Project Manager Project Coordinator Property Administrator Communications RDA Office Manager Project Area Specialist Official Technician 1 Seaso nal/ Seasonal 0.75 Administrative Secretary Total This budget contemplates changes in responsibilities and reclassification of staff members from part time to full time. The Agency will hire a third Project Coordinator, and will also add one employee in the Communications Position to promote branding, public education, and marketing on behalf of the RDA, its project areas, projects, and programs. The Administrative Budget covers four general categories of costs: 1. Personal Services includes salaries and benefits for the Agency staff. Since the RDA has adopted the City s Personnel Policy, staff s receipt of a cost of living increase will depend on the City s 2

11 adoption of such an increase for its workforce. 2. Materials and Supplies include costs for books, periodicals, postage, and stationery. Computer software and stationary supplies have increased by $4,750 or 21%, due to an increase in staff. 3. Operating and Maintenance Costs include auditing and legal fees, telephone and computer network support, and education and training for staff. The budget has been increased by $25,400, primarily to cover additional cell phone service and increased network support charges for additional staff members. 2011/2012 Administrative Budget Personal Services 1,177,087 Materials and Supplies Operating and Maintenance Charges and Services Administrative Service Fees 23, , , , Charges and Services Costs include rental for Agency office space, travel, employee recognition awards, cost of meals for RAC and Board meetings, and insurance/bonding costs. The budget is increased by $2,600 or 1.7% to cover high building rent, increased cost of meals, membership funds for additional staff, and a higher risk management premium. Insurance Surety bonds were reduced $5,000 to reflect actual costs. Capital Expenditures 24, Administrative Services Fees are paid to Total Salt Lake City Corporation for services provided $1,786,937 for assistance in preparing financial reports, human resource management, and time spent by members of the City Council and Mayor s Office working on Agency projects were reduced by $30, The Capital Expenditures portion of the Administrative Budget includes purchase of equipment and furnishings. The budget has been increased by $16,500 to cover the costs of office needs for the additional employees. The 2011/2012 Administrative Budget is 9.4% higher than the prior year. Funding of the costs is distributed across all funds as shown in the budget spreadsheet that precedes this discussion. FUND BUDGETS The following is a brief discussion of each of the funds and projects that will be allocated monies from each fund s revenue source. The funds are described in order of the columns on the budget spreadsheets. 3

12 SARR (STATUTORY ALLOCATION REDUCTION REVENUE) 2011/2012 Budget Administration $110,000 State Taxpayer Overpayment $32,000 Trustee s Fees $20,000 Facility Arena/Salt Palace $1,351,738 Arena Debt Service $7,385,000 Franklin Covey Field $1,755, West Park Blocks $1,030,179 Guardsman Way Ice Sheet $1,560,737 School District Payments #1 - Arena $390,000 #2 - Salt Palace $1,092,092 #3 - Franklin Covey $438,838 #4-500 West $412,072 #5 - Ice Sheet $624,295 TOTAL $16,202,483 The Community Development and Renewal Agencies Act permits the Agency to use up to 100% of the tax increment generated in project areas to pay for construction of sports facilities and convention centers where construction began prior to June 30, 2002; and recreational and cultural facilities on which construction began prior to December 31, (Refer to Utah Code Annotated, Section 17C for statutory requirements.) The debt service for these facilities can be paid throughout the 25-year life of the project area and for seven years after regular tax increment is no longer paid to the Agency. Only expenses related to administration, costs of these facilities, and payments to taxing entities are eligible uses of the funds. The Agency currently pays debt service and makes payments to the Salt Lake City School District from the Central Business District SARR funds. The Agency sold bonds for the construction of the Energy Solutions Arena and the Salt Palace project, both in the CBD project area. These are obligations of the Agency and will be paid in full after final annual payments are made from the 2014 tax year (2014/2015 Fiscal Year) tax increment allocations. The Agency has entered into Interlocal Agreements with Salt Lake City Corporation for the payment of the portion of the City s sales tax bond debt service related to Franklin Covey Field, the 500 West Park Blocks, and the Guardsman Way Ice Sheet. The interlocal agreements state that to the extent tax increment is available, the Agency will make the debt service payments. If tax increment is not adequate to cover the balance of the Agency s share of debt service, Salt Lake City Corporation is obligated to make the payments even if the Agency s assistance is reduced or eliminated in that year. The Agency has also executed agreements with the Salt Lake City School District to pay either negotiated amounts or a percentage of the actual debt service payments. These payments continue through the term of the bond obligations or the end of the permitted statutory life of the Central Business District Project Area. 4

13 CENTRAL BUSINESS DISTRICT PROJECT AREA OVERVIEW The Central Business District Project Area (CBD) was created on May 1, 1982 and will expire in tax year The unusual length of the CBD Project Area life exists as a result of the approval of a project area extension granted by the Agency s Taxing Entity Committee. The CBD Project Area is approximately bounded by North Temple and 500 South Street, 400 West and 200 East. Since State redevelopment law at the time of the creation of the CBD Project Area limited the area for tax increment collection to 100 acres within a single project area, the Agency carefully selected 100 tax increment generating acres from the designated 262-acre project area. The remaining 162 acres are still eligible for RDA funding. The CBD project area was adopted without a project area budget because this statutory requirement did not exist at the time of the project area s creation. The adopted redevelopment plans describe development objectives that include promotion of residential, office, and commercial projects, assisting in the planning and construction of public infrastructure and transportation, and promotion of cultural activities. This project area has no statutory obligation to contribute to the Project Area or City-Wide Housing funds. As a practice, however, the Board of Directors usually allocates approximately 10% of tax increment revenues after ongoing obligations to support housing development. GOALS AND OBJECTIVES In December 2010, the Board of Directors of the Agency adopted the following goals and objectives for the Central Business District Project Area: Gallivan Center Renovation o Host re-opening celebration and initiate new major programming for summer o Implement strategy to activate Gallivan Avenue by leasing retail spaces to day and evening users. Utah Theater o Lease storefront space. o Define appropriate use for facility. o Identify funding sources for renovation. o Prepare RFP for development. State Street Development o Ensure compliance with development agreement through start of construction Downtown Streetcar o Complete Alternatives Analysis. o Complete Environmental Assessment. o Begin design. o Identify funding sources. Downtown Mid-block Walkways o Identify opportunities to create mid-block walkways. 5

14 o Determine appropriate documentation of CCRs, easements, and other RDA land agreements that involve public space. Utah Performing Arts Center o Negotiate acquisition of property. o Complete predevelopment study. o Define scope of project in relation to establishing a cultural core. o Complete rollout of project concept to stakeholders. o Identify funding sources. Leonardo Grant Agreement/Distribution o Execute agreement with City and Leonardo for disbursement Board members requested that funding applications for the 2011/2012 Budget year be directed toward accomplishment of the adopted goals and objectives. Therefore, after all ongoing budget requirements are met, the remaining funds are used for projects that meet the specific goals and objectives as previously stated. REVENUE AND ALLOCATION REVENUE Tax Increment. The 2010 tax year is the third year the Agency will operate under the CBD Extension Resolution adopted by the Taxing Entity Committee on October 1, This resolution extends the CBD Project Area through The Agency has requested that the County Auditor distribute 100% of the tax increment to the Agency. The SARR Debt Service has the senior call on available tax increment. The remainder of funds will be split with 60% being paid to the taxing entities and 40% being retained by the Agency for redevelopment activities. CBD Tax Increment Growth: Tax Year Tax Increment % Change ,954, ,230, % ,715, % ,543, % ,317, % ,692, % ,363, % ,659, % ,590, % ,615, % ,438, % , % , % ,770, % 2011** 12,839,698 * Estimated CBD Project Area tax increment revenue is generated and collected from the increase in property tax values above the base value established at its inception within the 100-acre collection area of the total 262-acre project area. Tax increment revenues since 1997 are shown in the table on the left. State redevelopment law requires that the Agency request tax increment on the November 1 st prior to the beginning of the tax year the increment will be generated. This results in the Agency requesting more than anticipated in order to assure that the Agency receives all tax increment proceeds to reinvest in the project area. For this reason, the Agency s budget is prepared to include both Certain and Uncertain funding allocations. On November 1, 2010, the Agency requested $12,839,698 for the 2011 tax year. In March 2010 the report of the Salt Lake County Auditor verified the 2009 regular tax increment proceeds in the amount of $2,770,437. Starting with Tax 6

15 Year 2008, the taxing entities receive 60% of available tax increment after debt service for the remaining life of the CBD Extension. During the first seven years of the CBD Extension, the vast majority of tax increment proceeds are earmarked for the debt service payments under SARR. The certain and uncertain tax increment for CBD match the CBD amount requested in the Nov. 1 report. The Agency determined the CBD Project Area certain funding for the 2011/2012 budget at $2,804,997 with the uncertain balance at $10,034,701. Central Business District 2011/2012 Fiscal Year Revenue Source Amount Tax Increment - Certain $2,804,997 Tax Increment - Uncertain $10,034,701 Interest Income $34,000 Temporary Property Income $0 Reallocation $0 TOTAL $12,873,698 Projects funded with uncertain funding allocations are not started until the Agency receives the March report from the Salt Lake County Auditor s Office certifying actual tax increment received. A budget amendment is then prepared and presented for adoption that balances actual tax increment receipts and funding allocations. Other Funding Sources. In addition to tax increment revenues, the Agency also has the following revenue sources within the Central Business District: 1. Interest Income. The Agency s funds are invested in the State Treasurer s Pool. Interest income is budgeted as a part of the certain funding allocation. 2. Temporary Property Income. From time to time, the Agency receives lease revenues from various downtown rentals. Temporary Property Income is budgeted as a part of the certain funding allocation. This year, because we plan to vacate several of our previously rented properties, we have not anticipated substantial lease revenues. What does come in will be deposited in the Program Income Fund. 3. Reallocation. When projects are completed under budget or excess interest income is generated, these funds are reallocated as a part of the certain funding allocation for the current year. ALLOCATIONS Allocations of revenues to support redevelopment activities fall into two categories: Ongoing Obligations and Annual Allocations for Projects/Programs. Following is a description of these allocations for the CBD Project Area. Ongoing Obligations. 1. Tax Refund Liability. Each year, the State Tax Commission and the Salt Lake County Board of Equalization make adjustments to property tax assessments that result in a reduction of the property tax revenues. These adjustments are not always made during the tax year, which results in a need for the State and County to recapture of tax increment proceeds paid to the Agency. The Agency budgets funds each year to cover this possibility. 7

16 2. Administrative Costs. Administrative costs for the Agency are distributed among all funds. In general, the costs are allocated based on the amount of revenue available from each fund and the share of administrative resources expected to be spent on that project area s goals and objectives. Central Business District 2011/2012 Fiscal Year Ongoing Allocations Use Amount Ongoing Obligations Tax Refund Liability $45,000 Administration (includes office rent) $322,000 Streetcar Project Manager $15,000 Contract Planner $15,000 Assessment & Collection Levies $48,021 60% TEC Payment $1,682, South Main Reimbursement $500,000 Total $2,628, Temporary Property Expenses. The Agency owns property in the CBD that requires maintenance and repair, payment of property taxes, insurance and utilities. Most of these expenses are reimbursed by lease revenues. If the property is not leased, the Agency bears the cost of these expenses. The Agency is exempt from property taxes if the property is not leased % Taxing Entity Payment. Under the Taxing Entity Resolution adopted on October 1, 2004, the Agency is obligated to pay 60% of all tax increment generated in the CBD Project Area to the taxing entities based upon their percentage share of the tax rate. The $1,682,998 allocation represents 60% of the certain tax increment. The uncertain portion of the budget (noted below) includes an additional $6,020,821 that represents 60% of the uncertain tax increment. 5. Assessment & Collection Levies. The Salt Lake County Auditor has notified all Redevelopment Agencies that they will stop including certain assessments and levies in the annual tax increment disbursements per Utah Code. This is the first year that the RDA will account for this change in the tax increment disbursed by the County. 6. Streetcar Project Manager. The RDA has indicated that they will partially fund a Streetcar Project Manager that will oversee all streetcar projects in Salt Lake City. The Streetcar Project Manager will be a Salt Lake City employee in the Community and Economic Development Department. The Central Business District funds allocated for this position represent a portion of the RDA s total obligation 7. Contract Planner. The Contract Planner is intended to be a temporary position. The Contract Planner will be tasked with processing zoning changes that are necessary for the implementation of Salt Lake City s master plans in RDA Project Areas. Annual Allocations. The remainder of certain tax increment and reallocated funds are allocated to new projects and to sustaining Agency programs. For FY , no new funds are available in certain funds for new projects. The Agency is hopeful that a portion of the $10,034,701 uncertain tax increment may be available. Projects funded with uncertain tax increment cannot be started until after Salt Lake County receives the tax revenue and calculates 8

17 the Agency s share. The following is a list the Agency s projects, including those that fall into the uncertain project category. 1. Gallivan Art Tower. This is an Agency request to fund design and construction of a highly visible artistic structure or other feature identifying and designating the Gallivan Center.. The Board allocated $200,000 in 2011/2012 Fiscal Year Annual Allocations first priority uncertain funding. 2. Downtown Arts District Planning & Implementation. Agency staff submitted a $2 million request to proceed with a Downtown Arts District planning process. The Board approved $100,000 in certain funding, and $2,300,000 in second priority uncertain funding for this project. 3. CBD Streetcar Feasibility /Design/Construction. Funds would be used to assist Salt Lake City in determining the feasibility of the proposed downtown streetcar. The Board approved $110,977 in certain funding, and $510,411of third priority uncertain funding for this project. Use Amount Annual Obligations: Certain 0 Downtown Arts District Planning & Implementation 100,000 CBD Streetcar Planning /Design/Construction 110,977 Annual Obligations: Uncertain Gallivan Art Tower 200,000 Downtown Arts District Planning & Implementation 2,300,000 CBD Streetcar Planning/Design/Construction 510,411 Uncertain TEC Payment (60%) 6,020,821 City-Wide Housing Fund 501,735 Project Area Housing Fund 501,735 TOTAL UNCERTAIN AMOUNT $10,245, City-Wide and Project Area Housing Funds. Every year, the Agency requests funding for the Project Area and City-Wide Housing Funds. The City-Wide funds are used by Salt Lake City Housing and Neighborhood Development s Housing Trust Fund to assist in the development of affordable housing projects as required by the Community Development and Renewal Agencies Act. Project Area Housing Fund will be used to increase and/or improve the housing stock in Agency project areas. The Board approved an allocation of 5% or $501,735 for each fund from the uncertain allocation. 9

18 SUGAR HOUSE PROJECT AREA OVERVIEW The Sugar House Project Area was created on September 19, 1986 and will expire in tax year The Project Area covers the majority of the Sugar House Business District from 1300 East to 900 East and from Ramona Avenue south to Ashton Avenue. The Project Area includes approximately 95 acres designated as the Tax Increment Collection Area. SUGAR HOUSE PROJECT AREA BUDGET Similar to the Central Business District and West Temple Gateway Project Areas, no Project Area Budget was established during project area creation. The project area instead relies on tax increment financing permitted by Section , Utah Code Annotated This project area has no statutory obligation to contribute to the Project Area or City-Wide Housing funds. As a practice, however, the Board of Directors has allocated approximately 10% of tax increment revenues after ongoing obligations to support housing developments. GOALS AND OBJECTIVES In December 2010, the Board of Directors of the Agency adopted the following goals and objectives for the Sugar House Project Area: 1. Wilmington Avenue Property Redevelopment Close on the Purchase & Sale Agreement Manage all requirements in the Agreement 2. Sugar House Streetcar Oversee planning, funding, and construction of the Sugar House Streetcar project Work with UTA, the City Administration, and members of the community on the design and construction of the Streetcar Collaborate with UTA and property owners to identify potential funding sources for the operation of the streetcar line 3. Circulation, Alternatives Analysis, and Land Use Study Oversee planning, funding, and construction of the Sugar House Streetcar project Work with UTA, the City Administration, and members of the community on the design and construction of the Streetcar Collaborate with UTA and property owners to identify potential funding sources for the operation of the streetcar line 4. Granite Block Improvements Assist with the re-alignment of Wilmington Ave. with Sugarmont Ave. Create mid-block walkways Develop the McClelland and PRATT trails as they cross through the block 5. Wilmington Avenue Work with property owners to determine the scope of their development and any RDA assistance needed to ensure the creation of a high quality pedestrian environment on both sides of Wilmington Ave. 10

19 Work with property owners to determine appropriate density and best uses for the area Board members requested funding applications for the 2011/2021 Budget year be directed toward accomplishment of the adopted goals and objectives. SUGAR HOUSE REVENUES AND ALLOCATIONS. Revenue Tax Increment. Sugar House tax increment revenue is generated from the increase in property tax values within the collection area of the Project Area. Since 1998, the Sugar House Project Area has generated tax increment revenues as indicated in the adjacent table. On November 1, 2010, the Agency requested $3,000,000 for the 2011 tax year. Given the verification of actual tax increment proceeds for 2010, $1,200,000 has been budgeted as certain and $1,800,000 as uncertain funding allocations for fiscal year 11/12. Tax Tax Year Increment % Change , , % ,153, % ,425, % ,660, % ,900, % ,763, % ,642, % ,525, % ,498, % ,525, % ,403, % ,429, % 2011** 3,000,000 ** Estimated Other Funding Sources. In addition to tax increment revenues, the Agency also has the following revenue sources within the Sugar House Project Area: 1. Interest Income. The Agency s funds are invested in the State Treasurer s Pool. Interest income is budgeted as a part of the certain funding allocation. Sugar House 2011/2021 Fiscal Year Revenue Source Amount Tax Increment - Certain $1,200,000 Tax Increment - Uncertain $1,800,000 Interest Income $40,000 Temporary Property Income $0 Reallocation $0 Property Sale $1,250,000 TOTAL $4,290, Temporary Property Income. From time to time, the Agency acquires properties that are subsequently rented or leased. Temporary Property Income is budgeted as a part of the certain funding allocation. Currently, the Agency has no leased properties in the Sugar House Project Area. 3. Reallocation. When projects are completed under budget or excess interest income is generated, these funds are reallocated as a part of the certain funding allocation. 4. Property Sales. When the Agency sells property in Sugar House, the proceeds from that sale may be reallocated into the project area certain funding allocation for the current fiscal year. The Agency expects to sell the Wilmington Avenue property during

20 ALLOCATIONS Allocations of revenues fall into two categories: Ongoing Obligations and Annual Allocations for Projects/Programs. Following is a description of these allocations for the Sugar House Project Area. Ongoing Obligations. The Agency budgets annually for administrative and contractual costs. Use Amount Ongoing Obligations Administration 406,587 Tax Refund Liability $10,000 Temporary Property Expenses $6,500 Streetcar Project Manager $35, Administrative Costs. Administrative costs for the Agency are distributed among all funds. In general, the costs are allocated based on the amount of revenue available from each fund and the share of administrative resources expected to be spent on that project area s goals and objectives. Contract Planner $20, Tax Refund Liability. Each year, the State Assessment & Collection $20,544 Tax Commission and the Salt Lake County Board Levies of Equalization make adjustments to property tax TOTAL assessments that result in a reduction of the $498,631 property tax revenues. These adjustments are not always made during the tax year in which they were paid, resulting in a need for the State and County recapture tax increment proceeds paid to the Agency. The Agency budgets funds each year to cover this possibility. 3. Temporary Property Expenses. From time to time, the Agency s purchases property resulting in the need to pay property taxes, insurance, utilities, and repairs. 4. ontract Planner: The Contract Planner is intended to be a temporary position. The Contract Planner will be tasked with processing zoning changes that are necessary for the implementation of Salt Lake City s master plans in RDA Project Areas. In the Depot District, the Contract Planner will be tasked to rezone two blocks just east of the Intermodal Hub to a Transit-Oriented Development designation. 5. Streetcar Project Manager: The RDA has indicated that they will partially fund a Streetcar Project Manager that will oversee all streetcar projects in Salt Lake City. The Streetcar Project Manager will be a Salt Lake City employee in the Community and Economic Development Department. The Sugar House Project Area funds allocated for this position represent a portion of the RDA s total obligation. 6. Assessment and Collection Levies: The Salt Lake County Auditor has notified all Redevelopment Agencies that they will stop including certain assessments and levies in the annual tax increment disbursements per Utah Code. This is the first year that the RDA will account for this change in the tax increment disbursed by the County. 12

21 Annual Allocations. The remainder of certain and uncertain tax increment is allocated to new projects and sustaining Agency programs. Use Amount Annual Allocation Public Imp. & Dev. Incentives 340,000 Street Car Design & Implem. 750,000 Loan Programs 312,956 Streetscape Amenities Plan 403,413 Sugar House Compass 5,000 City-wide Housing 120,000 Project Area Housing 60,000 Uncertain Allocations 0 Public Imp. & Dev. Incentives 370,000 Street Car Design & Implem. 750,000 Streetscape Amenities Plan 500,000 City-wide Housing 90,000 Project Area Housing 90,000 Total $3,791,369 Funding Allocation Requirements or Conditions. 1. Public Improvement & Development Incentives. The Board approved $340,000 in certain funding and $370,000 in second priority uncertain funding. No specific project had been identified at the time the budget was adopted. 2. Street Car Design & Implementation. The Board approved $750,000 in certain funding for the design and construction of a street car line that runs from the 2100 South TRAX station to the Granite Furniture block. An additional $750,000 was allocation in first priority uncertain funding. 3. Sugar House Compass. The Board allocated $5,000 to assist with the relocation of the Sugar House Compass. 4. Loan Programs. The Board allocated $312,956 of certain to replenish the Agency s Loan Program account. 5. Streetscape Amenities Plan. The Board approved $403,413 for traffic calming and publicright-of-way improvements in certain funds and $500,000 in third priority for uncertain funding. 6. City-Wide and Project Area Housing Allocations. Each year, the Board typically allocates 10% of certain and uncertain tax increment to support housing projects within Agency project areas and city-wide. Upon receipt of the March report from the Salt Lake County Auditor s office, staff will work with Housing Trust Fund manager to prepare and execute an agreement that includes the actual dollar amount of the contribution and any statutory requirements for use of the funds for the City-Wide allocation. Project Area Housing funds will be used to acquire property or provide development incentives to developers and will be approved by the Board on a case-by-case basis. 13

22 WEST TEMPLE GATEWAY PROJECT AREA Overview The West Temple Gateway Project Area was created on August 1, 1987 and will expire in tax year The Project Area, in general, covers the area of 600 South to the I-15 off-ramp (approximately 1000 South) and 300 West to Main Street. The Project Area includes 92 acres of property located within the Central Community Planning District. The adopted Project Area Plan includes the development objectives that are to be accomplished over the life of the project area. The primary focus of these objectives includes constructing public infrastructure to support both the residential and commercial nature of the district; facilitating the development of residential and commercial properties in the district; and improving the transportation system within the Project Area. PROJECT AREA PRIORITIES In January 2011, the Board of Directors of the Agency adopted the following project area priorities for the Depot District Project Area: 1. Redevelop RDA-Owned Property surrounding the 900 South TRAX Station. Complete redevelopment strategy. Market property as recommended in redevelopment strategy. Address regulatory road blocks to development (e.g. zoning). Work with selected developers to redevelop RDA-owned property. Perform site preparation necessary to implement strategy. Plan and construct infrastructure necessary for the redevelopment of RDA-owned property. Acquire strategic properties. Monitor non-rda developments within the project area. 2. Mid-Block Walkways Strategically acquire property to accommodate implementation. Perform necessary site preparation. Design mid-block walkways. Construct walkways. 3. Downtown Streetcar Conduct alternatives analysis and environmental assessment. Complete design. Obtain and award bids for project construction. Construct alignment. Address regulatory road blocks to development along alignment. 14

23 Board members requested funding applications for the 2011/2012 Budget year be directed toward accomplishment of the adopted project area priorities. Tax Tax % Year Increment Change WEST TEMPLE GATEWAY REVENUES AND ALLOCATIONS ,000 Revenue , , % 20.13% Tax Increment. West Temple Gateway tax increment revenue is generated from the increase in property tax values within the collection area of the Project Area. Tax increment revenues since 1997 were as shown in the adjacent table , , , , , % 4.97% 20.28% % 3.68% On November 1, 2009, the Agency requested $1,500,000 for , % the 2010 tax year. In March 2011 the report of the Salt Lake , % County Auditor verified the 2010 tax increment proceeds to be , % $585, , % , % On November 1, 2010, the Agency requested $1,500,000 for , % the 2011 tax year. Given the verification of actual tax 2011** 1,500,000 increment proceeds for 2010, $500,000 has been budgeted as ** Estimated certain and $1,000,000 in uncertain funding allocations for the 11/12 fiscal year. Other Funding Sources. In addition to tax increment revenues, the Agency also has the following revenue sources within the West Temple Gateway Project Area: 1. Interest Income. The Agency s funds are invested in the State Treasurer s Pool. Interest income is budgeted as a part of the certain funding allocation. Source Amount Tax Increment - Certain $500,000 Tax Increment - Uncertain $1,000,000 Interest Income $8,000 Temporary Property Income $0 Reallocation $0 Property Sales $0 $1,508, Temporary Property Income. From time to time the Agency acquires properties that are subsequently rented or leased. Temporary Property Income is budgeted as a part of the certain funding allocation. Currently, the Agency has no leased property in West Temple Gateway. 3. Reallocation. When projects are completed under budget or excess interest income is generated, these funds are reallocated as a part of the certain funding allocation in the current year. 4. Property Sales. The RDA owns a number of properties in the West Temple Gateway Project Area and anticipates the possible disposition of some of these over the next few years. 15

24 ALLOCATIONS Allocations of revenue fall into two categories: Ongoing Obligations and Annual Allocations for Projects/Programs. Following is a description of these allocations for the West Temple Gateway Project Area. Ongoing Obligations. The Agency budgets annually for administrative and contractual costs. 1. Administrative Costs. Administrative costs for the Agency are distributed among all funds. In general the costs are allocated based on the amount of revenue available from each fund and the share of administrative resources expected to be spent on that project area s goals and objectives. 2. Tax Refund Liability. Each year, the State Tax Commission and the Salt Lake County Board of Equalization make adjustments to property tax assessments that result in a reduction of the property tax revenues. These adjustments are not always made during the tax year, resulting in a need for the State and County to recapture of tax increment proceeds paid to the Agency. The Agency budgets funds each year to cover this possibility. 3. Assessment & Collection Levies. The Salt Lake County Auditor has notified all Redevelopment Agencies that they will stop including certain assessments and levies in the annual tax increment disbursements per Utah Code. This is the first year that the RDA will account for this change in the tax increment disbursed by the County. Use Amount Ongoing Obligations Administration 90,000 Tax Refund Liability 200 Assessment & Collection Levies 8,560 Streetcar Project Manager 2,500 Contract Planner 5,000 Temporary Property Expenses 75,500 Certain Allocation People s Portable Garden 16,400 Public Improvements 0 Loan Programs 14,840 Streetcar Planning, Design and Construction 15,000 Land Acquisition & Development 230,000 Public Art 0 Branding & Education 0 City-wide Housing 25,000 Project Area Housing 25,000 Uncertain Allocations Public Improvements 250,000 Loan Programs 0 Streetcar Planning, Design and Construction 250,000 Land Acquisition & Development 400,000 City-wide Housing 50,000 Project Area Housing 50,000 Total $1,508, Streetcar Project Manager. The RDA has indicated that they will partially fund a Streetcar Project Manager that will oversee all streetcar projects in Salt Lake City. The Streetcar Project Manager will be a Salt Lake City employee in the Community and Economic Development Department. The Granary District funds allocated for this position represent a portion of the RDA s total obligation. 5. Contract Planner. The Contract Planner is intended to be a temporary position. The Contract Planner will be tasked with processing zoning changes that are necessary for the 16